The jobs report for June significantly underperformed expectations, as the economy created only 18,000 jobs, according to the Bureau of Labor Statistics. The topline unemployment rate ticked up a notch to 9.2%.

The consensus number prior to the release of the report was 110,000 jobs. The ADP employment report for the private sector showed a gain of 157,000 jobs. So this really lags behind the consensus and the other private survey. What’s more, the last two months were revised down, so April saw +217,000 and May just +25,000. Which means the past two months have seen a near-total erosion of job gains.

One reason for the poor survey is the loss of government jobs. The economy lost 39,000 jobs in the public sector last month, including 14,000 at the federal level. This is a direct result of austerity in the states and in the federal government, and the numbers have been falling since mid-2008, even with the inclusion of the stimulus. States must balance their budgets, and without help from the federal government, that results often in layoffs. In addition, we were supposed to believe that the President fleeced John Boehner in the negotiations over the 2011 appropriations, but now we’re seeing the results of the budget cuts there. The public sector took away almost all of the job gain in the private sector. Those public sector jobs, just like the private sector, are paid in money, which employees use to buy food and clothing and pay the mortgage. They are real jobs, real jobs which are going away mainly because of ridiculous ideology about government budgets being like a family’s.

The rest of the employment situation was unchanged, for the most part. The employment-population ratio ticked down 0.2 to 58.2%, lower than at this time last year. 14.1 million Americans are unemployed. The average workweek was down by 0.1 hour, and hourly earnings went down by $0.01. And in a scary circumstance, newly unemployed persons ticked up sharply in June. The number of persons unemployed for less than 5 weeks increased by 412,000. If they have the same difficulties finding new work as everyone else, that will continue to weigh on the numbers.

This is a pathetic jobs report. Meanwhile we’re talking about grand bargains and cutting more spending, along with people’s Medicare and Social Security. Washington couldn’t be more out of touch.

…I guess none of this matters, because David Plouffe told me nobody cares about the unemployment rate.

…Since the 2009 inauguration, over 500,000 government jobs have been lost, and if anything that has accelerated in recent months, after the major job losses of the Great Recession.

UPDATE: Here’s some of the reaction of Austan Goolsbee, chair of the Council of Economic Advisers:

Today’s report underscores the need for bipartisan action to help the private sector and the economy grow – such as measures to extend the payroll tax cut, pass the pending free trade agreements, and create an infrastructure bank to help put Americans back to work. It also underscores the need for a balanced approach to deficit reduction that instills confidence and allows us to live within our means without shortchanging future growth.

Confidence fairy. The beatings will continue until morale improves.

UPDATE II: Jared Bernstein: “Almost everything in today’s jobs report suggests recession-like conditions in the labor market.”